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straining competition in foreign and interstate commerce, and article 340 of the General Business Law of the state of New York in intrastate commerce. December 15, 1914, the Circuit Court of Appeals reversed the decree of the District Court and held the Davidson patents void for anticipation, as well as not infringed by the Sturtevant Company. Sirocco Engineering Co.- v. B. F. Sturtevant Co., 220 Fed. 137, 136 C. C. A. 91. This decree removed the chief contention between the Blower Company' and the Sturtevant Company as competitors. The District Judge decided this suit on all points in favor of the complainants and entered a decree as prayed for.

[1] There can be no doubt that the majority owners of stock of a corporation cannot use their power to the prejudice of the minority owners and that a court of equity will enjoin all contracts or conspiracies of the kind complained of in the bill. In proper cases they may be enjoined, even if only threatened. Vicksburg Water Co. v. Vicksburg, 185 U. S. 65, 22 Sup. Ct. 585, 46 L. Ed. 808. The District Judge assumed from the previous conduct of the defendants Foss and Gifford, and particularly from the letters of Foss, that he would be likely to carry out the plans complained of through a board of directors elected by them, and that the complainants should be protected against their doing so. To deprive stockholders holding a majority of the stock from voting it, and to turn over the control of a corporation to the minority stockholders, is relief to be given only under imperative necessity. Undoubtedly it may be done in a proper case, and has been done in some cases cited by the appellees. Milbank v. New York, Erie & Western R. R. Co., 64 How. Prac. (N. Y.) 20, in which the controlling corporation was enjoined from voting its stock in the controlled company because it was prohibited by statute from owning it; Dunbar v. American Tel. & Tel. Co., 224 111. 9, 79 N. E. 423, 115 Am. St. Rep. 132, 8 Ann. Cas. 57, which was on demurrer to a bill charging that the controlling corporation had purchased its stock in the controlled company for the purpose of restraining competition; Memphis R. R. Co. v. Woods, 88 Ala. 630, 7 South. 108, 7 L. R. A. 605, 16 Am. St. Rep. 81, where it was found that the controlling corporation had for its own interest oppressed and defrauded the controlled company; George v. Central R. R. & Banking Co. of Georgia, 101 Ala. 607, 14 South. 752, in which the court found that the controlling corporation had bought its stock in the controlled company to restrain competition and had used its control to waste the property of the controlled company; Steele v. United Fruit Co. (C. C.) 190 Fed. 631; Id., 194 Fed. 1023, 114 C. C. A. 666, in which the court found that the controlling company had bought its stock in the controlled company, used it to restrain competition, and subordinated the interests of the controlled company to its own.

[2] In these cases, and others that could be cited, the illegal acts complained of had been actually carried out or were admitted or were explicitly threatened. In the present case nothing illegal has been done, and nothing illegal has been threatened, although the complainants had reason to apprehend that the defendant intended to do these things if he could. We think the complainants will be sufficiently protected

if the defendants be enjoined, either severally or in combination from wasting or attempting to waste the Blower Company's property, or from restraining or monopolizing or attempting to restrain or monopolize the business of manufacturing and selling multiblade or propeller fans and blowers.

As so modified, the decree is affirmed, with costs of this court to the appellants.

DEVORKIN V. SECURITY BANK & TRUST CO. OF MEMPHIS, TENN. (Circuit Court of Appeals. Sixth Circuit. June 30, 1917.)

No. 2976. 1. BANKRUPTCY 114(1)-PROCEEDINGS FOR DISCHARGE-QUESTIONS OF FACT.

While in some cases a bankrupt's failure to keep any systematic books or records would of itself require the conclusion that this was done with intent to conceal, such conclusion is not generally inevitable, and the infert nce is one of fact, to be drawn from the proofs in a particular case.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. 720.) 2. BANKRUPTCY C180-FRAUDULENT TRANSFERS-SECRET TRUST FOR GRAN

TOR.

The law implies a fraudulent intent from a debtor's conveyance with a secret trust reserved for his benefit.

(Ed. Note.--For other cases, see Bankruptcy, Cent. Dig. $S 252, 253.) 3. BANKRUPTCY Ow407(3)—DISCHARGE-GROUNDS FOR DENIAL-FRAUDULENT

TRAXSFERS.

In deciding whether a conveyance by a bankrupt hindered, delayed, and defrauded creditors, so as to defeat a discharge, it is of no controlling importance that the trustee has not been able to avoid it, or even that he has not tried to avoid it.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. $$ 740, 742–749.) 4. BAXKRUPTCY C 407(3)--DISCIIARGE-GROUNDS FOR DENIAL-FRAUDULENT

TRANSFERS.

The transfer by a bankrupt of an absolutely worthless equity of redemption is not a sufficient ground for refusing a discharge, even though the trustee might get something to which he was not entitled as a bonus for a release of the property by him.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. 88 740, 742-749.) 5. BANKRUPTCY OM414(1)-FRAUDULENT TRANSFERS--BURDEN OF PROOF.

A bankrupt owned a half interest in real estate, the whole of which was worth $10,000 or $12,000. His interest was incumbered by one-half of a mortgage for $5,000, and by a purchase-money lien for $1,000 and a mortgage or deed of trust for $3,000 on his half interest. His attorney, who procured the loan secured by this last mortgage, felt morally responsible for the loan, and, fearing that on a foreclosure sale or in the hands of the trustee enough would not be realized to pay this mortgage, took a conveyance of the real estate, and agreed to advance whatever funds were necessary to meet payments on the incumbrances and to give the bankrupt two years within which to redeem. Held that, under the cir. cumstances, the trustee had the burden of showing that the creditors whom he represented might have been injured by this conveyance.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. $ 720.]

Appeal from the District Court of the United States for the Western District of Tennessee; John E. McCall, Judge.

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In the matter of Nathan Devorkin, bankrupt. From an order sustaining the objection of the Security Bank & Trust Company of Memphis, Tenn., to the bankrupt's application for discharge, the bankrupt appeals. Reversed and remanded.

Leo Goodman, of Memphis, Tenn., for appellant.
H. R. Boyd, of Memphis, Tenn., for appellee.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

DENISON, Circuit Judge. Devorkin was adjudicated a voluntary bankrupt, and directly thereafter filed his petition for a discharge. The Security Bank & Trust Company was a creditor, and supported opposition to the discharge by the specifications (1) that the bankrupt, with attempt to conceal his financial condition, had failed to keep the necessary books of account or records; and (2) that the bankrupt had transferred his interest in certain real estate with intent to hinder, delay, and defraud his creditors. The matter was sent to a referee, who heard proofs and found as facts that, while the bankrupt had wholly failed to keep books, this had not been done with intent to conceal his financial condition, and that the transfer of the real estate was a bona fide transaction, without intent to hinder, delay, or defraud.

The creditor treated the referee's report as that of a special master in equity, and challenged the result through exceptions. Upon the review thus invoked, the District Judge did not pass upon the first specification, but held that the real estate transfer had the inevitable effect to hinder, delay, and defraud, and that, therefore, the second specification should be sustained, and the application for discharge be denied. The bankrupt appeals.

[1] 1. We see no cause to disturb the finding of the referee that the failure to keep books was not with that intent which is made the basis for preventing a discharge. It appears that for three years, and since Devorkin had been the sole proprietor of the business, he had kept no books. The dealings were small and practically for cash; the debts proved were largely—those left over from an old connection. Doubtless there are cases where the failure to keep any systematic books or records would, of itself, require the conclusion that it was done with the intent to conceal, but such conclusion is by no means inevitable. The inference is one of fact to be drawn from the proofs in a particular case. Sheinberg v. Hoffman (C. C. A. 3) 236 Fed. 343, 149 C. C. A. 475; Sherwood Co. v. Wix (C. C. A. 4) 240 Fed. 692, — C. C. A. — Cases like Paper v. Stern (C. C. A. 8) 198 Fed. 642, 117 C. C. A. 346, and In re Hanna (C. C. A. 2) 168 Fed. 238, 93 C. C. A. 452, are not inconsistent with this rule.

[2] 2. Devorkin owned a half interest in a piece of business real estate, the whole of which had cost $10,000 or $12,000. His interest was incumbered by one-half of an old mortgage for $5,000 covering the entire title, by $1,000 unpaid lien for the piirchase price of his half interest, and by a mortgage or deed of trust for $3,000 upon his half interest, given by him more than a year before to secure a casb

loan for money needed on account of old liabilities in which Devorkin was involved. This last loan had been secured for him through the favorable representations of Mr. Goodman, his attorney, and Mr. Goodman felt a measure of moral responsibility upon the loan. Shortly before bankruptcy, and with knowledge on Goodman's part that it was imminent, Devorkin made a deed to Goodman of his half interest, and it is this conveyance which is the basis of the second specification. The testimony is undisputed that this deed was made at Goodman's advice and request, and because the first mortgage was about coming due and some refunding and extensions would be necessary, or else it would be foreclosed, and it was apprehended that not enough would be realized to pay the $3,000 mortgage, and there. would be a loss thereon for which Goodman would feel responsible. He also thought that, if Devorkin's title passed to a trustee in bankruptcy, any refunding or extension contracts would be impossible, and thus foreclosure and loss could not be avoided, while, if the title was put in his name, he could arrange the necessary extensions. He therefore agreed that in exchange for the deed, which would enable him thus to protect the existing junior mortgage, he would advance, personally, whatever funds were necessary to meet payments that must be made on the incumbrances, and would give Devorkin two years within which to redeem the property by paying whatever might thus accumulate against it.

It is entirely plain that this transaction, when thus fully stated, did not inherently involve any hindering, delaying, or dafrauding of creditors. It was, at most, a conveyance of Devorkin's equity of redemption by way of further security for existing debts; and the mere giving of a preference is no reason for denying a discharge. The trouble is that this trust was not expressed on the face of the deed, which (as we understand the record) appeared to be absolute and unconditional; and this situation suggests, if it does not reveal, a conveyance with a. secret trust reserved for the grantor's benefit-a transaction as to which the law implies a fraudulent intent.

(3-5] This leads us to the question which counsel have chiefly argued-whether the equity thus conveyed was worth anything. In deciding whether a conveyance had the effect to hinder, delay, and defraud creditors, it is of no controlling importance that the trustee has not been able to avoid it, or even that he has not tried to avoid it, and, doubtless, in the absence of any proof, there would be some presumption that property conveyed by the bankrupt had value; but it is none the less certain that a deed cannot be intended to or have the effect to hinder, delay, or defraud creditors, unless it is a conveyance of something rather than of nothing, and we cannot regard the transfer of an absolutely worthless equity of redemption as a sufficient ground for refusing a discharge. If such conveyance releases a right of possession pending foreclosure, which would be of substantial value to the trustee, that would make a question on which this record is silent; but the mere fact that the trustee might get something for a release paid to him as a bonus, and not because he was entitled to it, but to avoid trouble-this mere fact we cannot think enough to give condem

natory character to the transaction. We cannot escape the conclusion that the circumstances of this case the cost of the property, the admitted incumbrances, the apparent fear of all parties that the property would not pay the incumbrances, and the character of the contract accompanying the transfer-were sufficient to put upon the trustee the burden of showing that the creditors whom he represented might have been substantially damnified. This burden was not met; but we are not inclined, for that reason alone, now to direct that the discharge be granted. The objecting creditor rested on a misapprehension. If the objecting creditor desires, there should be a further hearing on this issue; we decide now only that the making of the deed, under the circumstances shown, does not of itself necessarily bar the discharge. Lacking an application for such further hearing, made within 30 days after mandate, the discharge should be granted.

The order must be reversed, and the case remanded for further proceedings in accordance with this opinion.

THE TRANSFER NO. 15.

THE LANSING.
(Circuit Court of Appeals, Second Circuit. May 8, 1917.)

Nos. 241, 242. 1. COLLISION 95(2)—STEAMSHIP AND MEETING Tow-INSUFFICIENT LOOK

OUT.

A collision in the daytime on East River between a steamship, which was passing up on the deep water range, and one of two car floats alongside a meeting tug, held, on conflicting evidence, due solely to the fault of the tug in misunderstanding the steamer's passing signal of two whistles, which was justified by the positions of the vessels, probably because of not having a lookout in the bow, and so crossing the signal and turning to starboard across the course of the steamship, which at once stopped and reversed, but too late to avoid collision.

[Ed. Note.--For other cases, see Collision, Cent. Dig. $8 200-202.] 2. COLLISION Cm99-PRECAUTIONS IN HARBOR—LOOKOUT.

It is incumbent on a vessel navigating New York Harbor and vicinity, even in the daytime, to maintain a vigilant lookout.

[Ed. Note.--For other cases, see Collision, Cent. Dig. $ 211, 212.]

Appeal from the District Court of the United States for the Southern District of New York.

Suit in admiralty for collision by the Lansing Steamship Company, Incorporated, owner of the steamship Lansing, against the steam tug Transfer No. 15 and car float N. Y., N. H. & H. R. R. No. 41, the New York, New Haven & Hartford Railroad Company, claimant, with crosslibel against the Lansing, in which the Seaconnet Coal Company intervened. Decree against the Lansing, and the other parties appeal. Reversed.

Appeal in admiralty from decree dismissing the libel of the steamship Lansing against the steam tug Transfer No. 15, and sustaining

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